Since I have a laptop, a smartphone, and an e-ink reader, I haven't seen a tablet as a necessity item. I still don't, however, for $99 why not, if the specs were somewhat decent. I'd even overlook the lack of an SD card slot.

I am kind of the same way. I have a laptop, a smartphone, and a eink reader that I have with me pretty much at all times (my messenger bag with my gear is rarely not with me, since I use it for work and school). On something that cheap, it'd be a neat toy.

Looks like Google took a page out of Microsoft's corporate playbook... when caught flat-footed, engage in FUD. For the uninformed, FUD (Fear, Uncertainty, Doubt) is when a company promises or leaks a rumor of a product that will be better than what is currently available in the hopes of influencing potential customers of those competing products to wait for the as-yet-to-be-released product.

It isn't MS-style FUD, though. MS' FUD was usually related to file and hardware compatibility, from what I remember.

Looks like Google took a page out of Microsoft's corporate playbook... when caught flat-footed, engage in FUD. For the uninformed, FUD (Fear, Uncertainty, Doubt) is when a company promises or leaks a rumor of a product that will be better than what is currently available in the hopes of influencing potential customers of those competing products to wait for the as-yet-to-be-released product.

Out of curiosity how is it that Google has been caught flat footed? What caused that? As it stands right now, they seem to have the best 7in tablet out there.

Out of curiosity how is it that Google has been caught flat footed? What caused that? As it stands right now, they seem to have the best 7in tablet out there.

Spec-wise? Probably.
(Although a fair amount of people put a lot of stock by screen resolution and storage capacity/expandability. The Nexus is *not* the best 7incher for *everybody*.)

But, anyway, Nexus 7 is a pretty vanilla device, service- and software-wise.
Its value is all in the hardware and the generic android features; it has no optimizations for specific segments of the market. Plus, it only addresses the 7in market that Amazon's ecosystem fork already took a big bite out of, *last year*. So it's a reaction to Amazon's *past* moves, not an anticipation of this year's moves.
Add in the new Nooks and the mythical baby unicorn, and one can easily argue that Google didn't read the competition particularly well. Apparently, they thought the competition would be solely for the entry-level 7in market and that Amazon wouldn't have the guts to go after the iPad. They were doubly wrong: Amazon *and* B&N both are going after a slice of the full-size iPad market.
And Google itself isn't.

Thus, they *appear* to have been caught off-base now that both Amazon and B&N have raised the ante with very high-quality 9in models that threaten to foreclose the market for the larger, generic Android tablets. At a minimum, they make it a lot harder for the hardware-only vendors to justify premium pricing for *their* generics. And since those vendors don't have significant after-sale ecosystem revenue to justify lower margins--Play store revenue goes to Google, not them--they are going to have a hard time balancing the books on their larger tablets. (Unless *they* start forking and creating their own ecosystems like Amazon did.)

This forces Google to go one of three ways: either share their ecosystem recurring income with the hardware vendors, or they write off their high-end tablet OEMs... or, as the rumor suggests, they go whole hog after the entry level, undercutting everybody and buying time and market share for future upgrade products. (Much as Amazon and B&N did with eink readers; get them to buy the low margin entry product first and then get them to move to the higher-margin upgrade version.)

The war isn't just for short-term sales, it is also for long-term consumer ecosystem allegiance. And entry-level buyers don't stay entry-level users forever. So there is *some* logic to Google doing a super cheap Nexus *if* they are unable/unwilling to mix it up in the 9in space with NookHD+, FireHD9, and the iPads, this year. (Live to fight another day.)

Personally, I would rather see them go for the higher end market now but product development cycles being what they are, that may not be an option. In fact, even the cheapie Nexus may not be an option for this calendar year.

Which is where the FUD campaign (potentially) kicks in: it is a long-standing tradition in the tech industry to use rumors and vaporware promises to draw consumer mindshare away from competitor products and buy time until you can catch up. Hence the logic of a rumored 7inch Nexus at $99 and a higher-grade product at $199: A classic market freeze attempt to get people who hear it to hold off buying 7inchers to see what the new product looks like.
And if only a slightly upgraded Nexus 7 (say with microSD) shows up... Well, it was just a rumor anyway.